BOC Aviation awarded $406.2 mln over planes stuck in Russia

BOC Aviation

12/04/2023 24:15

By Jonathan Stempel
       NEW YORK, April 11 (Reuters) - A U.S. judge on Tuesday
ordered Russia's largest cargo airline to pay aircraft lessor
BOC Aviation Ltd  601988.SS  $406.2 million after being declared
in default on leases for three Boeing 747-8F planes following
Russia's invasion of Ukraine.
    U.S. District Judge Lewis Liman in Manhattan found the
defendant AirBridgeCargo Airlines LLC and its parent Volga-Dnepr
Logistics BV liable, after the invasion and resulting sanctions
left the plaintiff BOC Aviation unable to reclaim the aircraft.
    Lawyers for the defendants did not immediately respond to
requests for comment. A lawyer for Singapore-based BOC Aviation
had no immediate comment, having yet to hear from his client.
    Aircraft lessors have sued dozens of insurers and lessees
for billions of dollars over hundreds of aircraft stuck in
Russia since the February 2022 invasion of Ukraine. 
    BOC Aviation said AirBridgeCargo went into default after
being unable to maintain required reinsurance coverage.
    This followed restrictions imposed by the European Union
against Russian carriers on aircraft used in Russia, and Russian
sanctions on foreign assets, including internationally-leased
aircraft.
    BOC Aviation said it was able to recover one leased plane
and two of its four engines, while the two other planes and two
other engines remained in Russia.
    The lessor's majority shareholder is Bank of China Ltd
 601988.SS .
    In a 57-page decision, Liman said BOC Aviation had proven
that the Russian government had "effected a seizure" of the
planes and engines by keeping them from being used outside
Russia, "save perhaps to areas in Ukraine or for the purposes of
the war."
    The judge said that undermined BOC Aviation's right to
reclaim possession.
    He also rejected AirBridgeCargo's defenses that neither side
could have foreseen a default, and it was impossible to ground
the planes outside Russia because the country had ordered them
flown back.
    Liman ruled after a one-day nonjury trial held on April 3.
    The case is BOC Aviation Ltd v AirBridgeCargo Airlines LLC
et al, U.S. District Court, Southern District of New York,  No.
22-02070.

 (Reporting by Jonathan Stempel in New York; Editing by Jamie
Freed)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))